Preparing for a Divorce in Alabama (or anywhere)

Alabama Divorce Preparation

The article explored what someone facing divorce ought to do to best protect themselves under Alabama divorce laws. Recently, I have noticed that many people have been coming to this blog looking for information on Alabama divorce laws, but particularly on preparing for divorce. If you read this post, it will show you each of the 13 Steps I have outlined so you can get more information for each one. I hope it is helpful to you.

Although there are other things to say on the subject, if you consider these steps and discuss them with your lawyer, it should ease the difficulty of the process.

Step 1: Find a Wise Guide

An experienced divorce lawyer I know is fond of telling his clients that you don’t need a lawyer to get a divorce, but you need them for the consequences of your divorce. He is right. You can likely get a divorce by finding some forms on the internet or hiring a lawyer that advertises for cheap uncontested divorces. If you have no children, a marriage of only a year or two in duration, no assets or debts have been accumulated during the marriage, and you and your spouse agree on everything, then you probably don’t need a divorce specialist.

Look for a lawyer that has at least 5-10 years’ experience practicing primarily divorce and family law. Find out the lawyer’s philosophy regarding litigating cases versus settling them. My personal opinion is that you should want a lawyer who makes it a priority to attempt to achieve a fair settlement for you, but who is capable and willing to litigate the case before a judge.

Step 2:  Make an accounting of the family finances

The next step is to gather as much information as possible in order to get a clear picture of your family’s financial situation. If you are in charge of your family’s finances, you may already have a firm grasp on this. On the other hand, you and your spouse may have no idea what you own or owe.

One of the primary functions of the divorce process is to divide the marriage’s assets and debts. To get a fair division, you must first know what there is to divide.

This is a three-step process:

2.1: Determine what you own

That may be simple for some. You are one step ahead if you have a good handle on the family finances. If not, it’s time to get to work on your homework.

Many of the assets of the marriage will be obvious – your home, financial accounts, vehicles, recreational vehicles, and so on. Others may be less obvious, such as artwork, bearer bonds, a spouse’s deferred compensation, proceeds from a pending lawsuit, and so on.

Then there’s the chance that your spouse is concealing assets (this is more likely if they are the ones initiating the divorce or if divorce has been discussed previously).

Examine all potential assets. Attempt to collect documentation on each one, including current value where possible. Look for any recent real estate appraisals in particular.

If your lawyer charges you by the hour, any information you can gather should save you a lot of money. If you are unable to obtain certain documents, your lawyer may have to obtain them through the discovery process.

2.2: Determine what you owe

You must determine all debts incurred during the marriage, regardless of the name under which they were incurred. The Divorce Judgment must specify who is responsible for the debt, whether it is in your name, your spouse’s name, or joint names.

I advise each of my clients to obtain a copy of their credit report. This allows you to ensure that you are aware of all debts in your name. It is not uncommon for one spouse to incur debt in the name of the other spouse without their knowledge. If this has occurred, you must be aware of it before the divorce is finalized, not after.

There are numerous methods for obtaining a copy of your credit report. You can get a free copy of your credit report once a year by visiting www.annualcreditreport.com.

Once you’ve determined the total amount of debt, obtain copies of the account statements to determine the balances. The statements may also be required if your spouse has made large or inappropriate purchases on the cards.

If you can’t find credit card statements for each account, contact the credit card company and ask them to send them to you. You should look at their websites to see if you can make the request online. Normally, I expect my clients to receive a minimum of 12 months’ worth. Check with your attorney to see what he suggests.

2.3: Determine Income (yours and your spouses)

Your lawyer will require documentation proving your income (if you work outside the home) as well as your spouse’s income. This is significant for a variety of reasons, the most important of which are child and spousal support.

If your spouse is a salaried employee, your job is made easier. Obtain a copy of your most recent pay stub as well as your most recent tax return. If you do not have access to either of these, you can request a copy of your income tax return from the IRS.

Form 4506, Request for Copy of Tax Return, must be completed and mailed to the IRS address specified in the instructions, along with a $39 fee for each tax year requested. Copies of returns filed in the last six years are usually available. The form is available for download at www.irs.gov.

If your spouse is self-employed, calculating their income becomes much more difficult. This is why keeping your divorce plans private is essential. You might want to ask your spouse (or, if he has one, his business partner or his partner’s spouse) about income in private. You can try to obtain copies of the company’s bank account statements and financial statements.

A copy of a loan application or net worth statement that a self-employed spouse may have submitted to a bank or other lending institution for a loan is another good way to prove their income and assets.

It can be difficult to prove a self-employed spouse’s actual income. Gather all of the information you can at this point. In the case of a self-employed spouse, your lawyer will most likely have to assist you by obtaining and analyzing additional information through the discovery process.

Step 3 – Make photocopies of all financial records

Make two copies of each of the important financial documents as you gather them. One is for you, and the other is for your attorney. Maintain a copy in your divorce journal or file folder. It is critical to keep track of which documents you have, which you still require, and which you have given to your lawyer.

Each case and each lawyer may necessitate a distinct set of documents. However, some of the most common ones will include at least the following fundamental ones:

  • Income tax returns for at least 3 years.
  • Most recent pay stub showing year to date income;
  • 12 months statements on every financial account (including retirement accounts);
  • 12 months statements on every credit card or line of credit; and
  • Deeds for all real estate owned by either party individually or jointly.

Step 4 – Prepare two budgets

The next step in divorce preparation is to create two budgets (one that shows the situation in the house before the divorce filing, and one that is your estimated budget for after the divorce).

Most people dislike creating a single monthly budget, so I realize I’m asking a lot to suggest that creating two of them is beneficial. But there is a method to the madness. It is critical to understand how much it currently costs to run your household. It is also critical to understand what your living expenses will be after the divorce. Let’s take them one at a time.

A. Know your current monthly budget

Knowing the monthly budget is important for the following:

  1. In an alimony case, it is critical to show the standard of living and the financial need.
  2. It is helpful in assessing specific needs of the children that may not be covered in basic child support (e.g. particular medical needs or private school expenses).
  3. It will help you in planning your post-divorce budget.
  4. If your spouse is self employed and under reporting his income, showing that monthly expenses exceed what they claim they make can show they are attempting to hide their true income.
  5. A judge may utilize this information to determine temporary support while the case is pending.
  6. You should know this stuff in order to properly manage your finances whether you are getting a divorce or not!

B.  Make an estimated budget of post-divorce expenses.

This is important for your personal planning and will most likely influence your divorce objectives. To evaluate your settlement options or what you will ask the judge for in a trial, you must first determine how much money you will require.

This will almost certainly necessitate some guesswork on your part. However, this is why it is referred to as an estimated budget. It will be an ongoing project. The point is to plan ahead of time for your living expenses as you embark on a new chapter in your life.

C.  How to make your monthly budgets.

If you already keep track of your checking accounts using a software program like Quicken, the process is simple. A monthly budget report is easily printed. If you don’t, you’ll need to sit down and go through your checkbook and/or your spouse’s checkbook for the last three months. This will reveal the monthly and quarterly expenses you may incur (divide the quarterly expenses by three and enter them in the budget as a monthly expense).

You should then consider any annual or semi-annual expenses you may have, such as life insurance, homeowner’s insurance, and so on, and convert them to a monthly figure that you can include in your budgets.

Try to be as realistic as possible when creating your budget. You should be conservative in your budget (don’t understate your expenses and end up with a budget that doesn’t meet your needs realistically) without grossly overstating it (which a judge would frown on should the case go to court). It is undeniably a fine line. The best advice is to base it as much as possible on real numbers.

Step 5 – Document & Safeguard Personal Property

Inventory and photograph your valuable household furniture, art, jewelry, and other valuables. Inventory and photograph the contents of any safe deposit box or family safe owned by your family. Also, make photocopies of any important documents stored in the safe or safe deposit box (if you did not already do so when collecting the financial records).

Unfortunately, these documents and property frequently “disappear” once the divorce process begins, so gather your proof now.

You should also consider safeguarding any items of particular value (whether monetary or sentimental) that are small in size. I’m talking about things like your mother’s jewelry, your father’s fountain pen, your high school yearbook, childhood photo albums, and so on. Your spouse may not share your desire to divorce in a dignified manner. It is preferable to protect items that are particularly difficult to replace.

Please keep in mind that I am not suggesting that you empty the house of its contents. That is a sure way to escalate the divorce and ensure that it will not be civilized. DVD players, camcorders, and laptop computers can all be replaced. Simply record them in your inventory and photograph them for proof in the event that it is ever required.

Step 6 – Establish your own credit

If you do not already have a credit history, you should start one right away. Get a credit card and a gas card. After the divorce, you will need to establish your own credit. And the earlier you start the process, the better. Don’t put it off until after the divorce. You can begin right away.

Once you’ve obtained the accounts, you can improve your credit by using the cards and then paying them off each month.  At this point, it is important that you use these cards only to the degree that you can pay them off each month. Your goal is to establish a favorable credit history, not to run up a bunch of debt.

Step 7 – Assess the Financial Accounts

You already know what accounts exist and what their balances are if you’ve completed the previous steps in this series. You must make a decision regarding their disposition.

It is an unfortunate reality that when some spouses learn or decide that a divorce is imminent, one of the first things they do is raid the accounts. This is usually done after receiving particularly bad advice from an adversarial lawyer or a well-meaning but inept friend.

In an ideal world, neither party would touch the financial accounts except to pay regular household bills until the divorce was finalized. However, in an ideal world, you would not be reading this blog, and I would be working in a different field because divorce lawyers would be unnecessary.

Having said that, I do not recommend that you empty the accounts. This immediately escalates the divorce conflict and stress. It will also not go down well with the divorce judge.

So you don’t want to clean out the accounts, but you do want to protect yourself from your spouse doing so. If you have a reasonable fear that your spouse will raid the accounts, the only reasonable solution I know is to withdraw one-half of the funds and place them in a new account in your own name. Do not conceal, discard, or waste the money. Document every penny spent carefully because you will almost certainly need to account for it later in negotiations or at trial. Furthermore, you should not do this for the regular checking account from which household expenses are paid unless there is a significant balance in the account above and beyond the amount required to pay the current month’s bills. You don’t want to do anything that will cause checks to bounce.

This is not a blanket recommendation. It is preferable if the money can be kept there and neither party removes it. Another option for certain types of accounts is to place the account on hold. Obviously, this is only practical for accounts that are not used on a regular basis to pay bills and expenses.

Consult with your lawyer before deciding how to handle your financial accounts. If they advise you to withdraw all of the money for no apparent reason, I would seriously reconsider whether that lawyer shares your desire for a civilized divorce.

Step 8 – Address the Credit Accounts

If you are getting divorced, you do not want to be held liable for any accounts on which your spouse has charging privileges. It is not uncommon for an enraged spouse to go on a shopping spree after learning of a divorce. Similarly, some lawyers may advise their clients to take out cash advances on joint cards as a buffer while the divorce is pending, or to charge a large amount in lawyer’s fees on joint cards.

You should think about canceling such joint accounts or, at the very least, lowering the spending limits. If they are an authorized user on your credit cards, find out what steps you need to take to remove them as an authorized user.

Consider home equity lines of credit as well. You should think about whether you should close it or restrict access until the divorce is finalized.

Whatever you do, don’t ignore seriously considering how to handle this issue, and consult with your lawyer before making a final decision.

Step 9 – Avoid additional debt or major purchases

Avoid taking on new debt or making large purchases.

This suggestion is related to determining how to handle credit accounts, but it deserves its own mention. If you are going to divorce, you should be fiscally conservative. It is not the time to install a pool, buy a new car, or buy new furniture on credit. You want to simplify the financial situation rather than complicate it.

When a divorce occurs, one of the first things that must occur is for the divorce court to determine who is responsible for what debts. In general, the less complicated the debt situation, the easier the task.

I should emphasize that this is all general information. You may need to deviate from it due to your unique situation. For example, there may be times when you need to purchase a vehicle, and it is preferable to do so before the divorce because you will not have enough credit on your own after the divorce. So, of course, you’ll want specific advice from your own lawyer – which is why Step 1 was to find a wise guide (an experienced, competent divorce law specialist)!

Step 10 – Stay Put (until further notice)

One of the most common questions I am asked by my clients is whether they can move out of the house. In most cases my answer to them is to stay put. It is not the answer most of my clients want.

I know that things are stressful. I know that they will likely get worse before they get better. Unfortunately, there are several reasons to avoid leaving. The most important ones are the following:

  1. It could jeopardize your custody claim. If you end up in a custody dispute, then if you leave the house and the children remain there with your spouse you will almost guarantee that you will not receive primary custody. If the case becomes contested, it could drag out for many months (even a year or two). If your spouse has had primary physical custody that entire time and you’ve had alternate weekend visitation, then unless your spouse has made major mistakes in the interim, they will likely maintain primary custody.
  2. It could affect your property interests. You’ve moved out. Your spouse pays the mortgage the entire time the case is pending. Some judges may factor that in when making the property division.
  3. You will lose leverage in the negotiations. This is big. You want the divorce. Your spouse doesn’t. You decide you have to get out of the house. You move to an apartment and are paying your rent and the home mortgage. Now under the Pre-trial Status Quo Order you may be required to keep paying it as long as the case is pending. You have just given your spouse a major incentive to drag out the litigation. I see it happen all the time. Eventually you decide to settle for much worse terms because you can’t keep paying for two households. Do not make this mistake.

Moving out of the house can have dramatic effects on the case. Do not do it without discussing it with your lawyer and giving it a great deal of thought. You should know, also, that some judges will consider a motion for temporary possession of the residence pending the trial. This varies dramatically from county to county (and sometimes even from judge to judge) so you will want to discuss it with your lawyer.

It goes without saying that if domestic violence is an issue, then all of this is moot. You will need to take whatever steps you must to protect yourself. Just make sure you let your lawyer know what is going on. In the case of domestic violence, your lawyer may actually be able to have your spouse removed from the house.

Step 11 – Keep a diary

It is critical to document all major events that occur until the divorce is finalized. Your lawyer will most likely want your assistance in reconstructing a chronology (a list of major events in chronological order) that led to the divorce filing. You should also start keeping meticulous records of new events and incidents as they occur. Simply record the date, what occurred, and any witnesses who may have witnessed it. If your case drags on, events will start running together and your memory may fail you. Don’t count on it.

Instead, keep a running journal. Provide this to your lawyer on a regular basis so that he is aware of any significant facts in your case.

I should point out that you should consult with your lawyer before acting on this advice. Some lawyers may object to having an ongoing record like this because it could be obtained by the opposing lawyer during the trial’s discovery phase (something that could have a negative effect on your case). Alternatively, they may want you to take specific steps to protect it from being discovered by the opposing lawyer. These are legal issues that are beyond the scope of this blog. Suffice it to say, you should consult with your lawyer first.

Step 12 – Consider a PI

When deciding how to divide property in a divorce, Alabama law takes “fault” into account. Furthermore, depending on the facts, adultery can have an impact on custody decisions.

If your spouse is having an affair, having proof of it is preferable to not having it. This is true even if you intend to settle your case completely. In fact, having proof of an affair is frequently what gets the case settled on your terms.

Finding out your spouse has cheated is unpleasant, and you may be like many of my clients who prefer not to know. However, you should exercise caution before making that decision. Consult with your attorney. Listen to their advice if you’ve chosen a good one. If you want proof, now is the time to get it. If you choose to go that route, your lawyer should be able to talk to you about the costs involved (they are not cheap) and how to improve your chances of making the surveillance effective.

Step 13 – Be Good

Here’s the deal: you’re about to be examined under a microscope. You’re reading this blog, so I’m assuming you’re going through a divorce and want the process to go as smoothly as possible. Regrettably, this is not always possible. For whatever reason, your spouse may not share that goal. Others (lawyers, friends, etc.) may influence them to believe that what you are offering is not fair.

So, regardless of how diligent you and your lawyer are in attempting to settle the case fairly and quickly, your case may end up going to trial. That being said, you should not load the gun with ammunition for your spouse to use against you.

This means no dating, carousing, or partying. If custody is a possibility, you must make the children your top priority (they should be, right?). Even things that are perfectly legal and harmless at other times can be twisted in the hands of your spouse’s lawyer to appear suspicious or worse.

For example, suppose you go out to dinner and drinks with coworkers to celebrate a coworker’s birthday. This appears to be innocuous. However, in a custody case, the following questions may be asked: While you chose to go out drinking with your friends, was your spouse at home caring for the children? Are you in a relationship with Joe/Jane, who was also present at the party? How many drinks did you consume that evening? Isn’t this something you did frequently during your marriage (i.e. prioritizing social events over family)? Did you drive home that night under the influence of alcohol? Etc.

You get the idea. This is a ridiculous example, but why subject yourself to such scrutiny? Don’t put the judge in the position of deciding whether you’re telling the truth about this being a harmless and isolated incident.

Spend time with your children, work, stay at home, exercise, and take care of your spiritual life. Maintain an unblemished reputation. Be a good person. It’s not bad advice whether you’re going through a divorce or not.

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